PFI review would be a first step but government needs to go further

Unite, the UK’s construction union, has cautiously welcomed reports that Philip Hammond will use his budget next week (Monday 29 October) to launch a review of the Private Finance Initiative (PFI).

It has been suggested that the review is a result of the collapse of Carillion earlier this year. Carillion’s demise resulted in the PFI deals which had been created to build two new hospitals the Midland Metropolitan and Royal Liverpool hospitals, collapsing. It has been suggested that the review will signal the end of PFI but it will not revisit previous PFI deals

Unite assistant general secretary Gail Cartmail, said: “If these reports are correct this is a step forward as PFI schemes cost taxpayers billions of pounds, with the spivs in the city coining it.

“However if the government is serious about using the budget to tackle bandit capitalism then it needs to go much further. It must not only end the PFI scam but adopt Labour’s policy of reviewing all PFI contracts and bringing the worst offenders back in house.

“Carillion’s collapse was not just a result of problems on major construction projects but was equally about its addiction to outsourced contracts, many of which were linked to PFI contracts. This type of facility management, maintenance and cleaning contracts should be the first to be brought back in house.

“While the demise of PFI is long overdue, the government needs to be entirely clear about how it will be replaced. The UK is crying out for infrastructure investment, including hospitals, schools and roads, and these schemes must not be delayed or mothballed.

“The government would cause grievous damage to the UK’s construction industry, which is already reeling following Carillion’s collapse, if it (scrapped PFI) and did not have a new funding system already in place and fully operational.

“If the government has learned the lessons of PFI, then future infrastructure projects should be directly funded by the taxpayer, entirely removing financial speculators from the equation.”

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